More on the Solar Industry

In a recent post, I discussed the (somewhat disappointing) financials of Q-Cells, Germany's largest producer of solar cells.

Two of Q-Cells' major competitors have now also released Q1 results. The contrast between the two couldn't be starker:

- Ja Solar, China's largest producer, is suffering even more than Q-Cells: Revenues have collapsed from 164 m $ in Q1 2008 (143 m $ in Q4 2008) to only 34 m $ in Q1 2009. Their gross profit (i.e. before allocation of selling, general, admin and r&d expense) is -21 m $, and total loss for the quarter is 28 m $. They are far from bankrupt (equity is 670 m $), but the revenue collapse is quite shocking.

- Meanwhile, First Solar, the biggest US producer, is doing perfectly fine: Q1 net sales were 418 m $, up from 197 m $ in Q1 2008. And profits are skyrocketing: 165 m $, after 47 $ in Q1 2008. The rest of the industry is struggling to break even, and First Solar achieves a gross profit margin of 40 %. Amazing, isn't it?

I'm no expert on the solar industry. Maybe the product portfolio of these companies is different and not comparable. But it sounds to me that all of them are active in mass-market photovoltaics. How can it be that the industry complains about unprecedented hardships, but one company continues to post record sales and record profits? (Not a rhetorical question. I simply don't know the answer.)